Peppermint Innovation Limited

PIL Details

Peppermint Innovation Limited (ASX: PIL) develops and commercializes mobile banking, payments, and remittance business with operations in the Philippines to create financial inclusion for users.

Operating and Financial Performance for the Year Ended 30 June 2021 (FY21)

• The revenue stood at $1.94 million in FY21, down 31% YoY, and net loss stood at $2.83 million in FY21, up 67% YoY.
• The cash balance at the end of the period stood at $3.11 million.
• The company increased the number of registered bizmoto agents to 55,218, bizmoGo riders to 636 and Merchants to 688.
• Raised $3,405,000 via capital raisings. Additionally raised $1,865,000 from shareholders exercising options.

Income Statement (Source: Company Reports)

Outlook: 

The company is focused on operational expansion by targeting a sales marketing campaign for bizmoto platform. Recently, launched bizmoProtect - a micro-insurance product with the partnership of Cebuana Lhuillier Insurance Solutions that could positively impact the company's financial performance. In addition, the company's bizmoPay service is expected to provide its 55,000+ registered bizmoto agents, network members and enterprise platform partners with a safe and seamless means of micro loans to grow their enterprises. The company intends to continue to develop its four business divisions via organic growth and strategic acquisitions.

Key Risks: 

The company is prone to credit risks and has prudent credit policies in place to mitigate the risk. However, its activities may expose it to multiple financial risks in the future: market risk (including currency risk and fair value interest rate risk), credit risk, liquidity risk and cash flow interest rate risk.

Technical Overview:

Daily Price Chart

Source: REFINITIV, Note: Purple color line reflects Relative Strength Index (14-Period)

Note: Investors can consider exiting from the stock if the Resistance levels mentioned as per the technical analysis have been achieved and are subject to the factors discussed above.

Stock Recommendation: 

The company has delivered a 1-month and 6-month return of ~+27.27% and ~-44.00%, respectively. Moreover, the stock is trading lower than the average of the 52-week high price of $0.044 and the 52-week low price of $0.01.

Considering the facts above, current trading levels, expected economic recovery, optimistic outlook and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.013 (Time: 12:14 PM (GMT+10), Sydney, Australia) as of 22^nd October 2021. 

King River Resources Limited

KRR Details

King River Resources Limited (ASX: KRR) is an exploration and mining company.

Results Performance for FY21 (For the Year Ended 30 June 2021)

• The company has generated revenue of $6,094 in FY21 compared to $1,764 in FY20.
• It recorded net loss after income tax of $0.97 million compared to the net loss of $1.12 million in FY20.
• The net cash outflow used for operating activities increased to $0.74 million in FY21 from $0.63 million in FY20.
• The cash balance at the end of FY21 rose to $6.12 million compared to $0.58 million in FY20.

Income Statement (Source: Company Reports)

Recent Updates:

• As per the press release dated 5^th October 2021, the company informed that Como Engineers awarded the Definitive Feasibility Study (DFS) for the HPA Type 1 Precursor Processing Plant and the work on the DFS would be starting immediately.
• Signed Agreement: The company, on 6 October 2021, declared that it has signed a Participant Agreement with the Future Battery Industries Cooperative Research Centre (FBICRC). This is for collaboration in the below projects:
• Cathode Precursor and Active Materials Production Pilot Plant
• Development and application of Vanadium Redox Flow Batteries
• The company, on 13 October 2021, declared the return of significant gold values from helicopter reconnaissance exploration of its Mt Remarkable regional tenement holdings.

Outlook

The completion of the Kwinana High Purity Alumina PFS showcased the potential for the company to become a producer of high value, high purity, alumina sourced from an industrial chemical feedstock and utilizing the new KRR ARC HPA process. Further, the development work has started on a Mini-Pilot Plant. This process is aimed at demonstrating the ARC HPA process works at a larger scale for the DFS and to generate market samples.

Key Risks

The group is exposed to various financial risks that include interest rate risk, credit risk, liquidity risk, and cash flow interest rate risk. The risk of changes in market interest rates mainly relates to cash assets rates.

Technical Overview:

Daily Price Chart

Source: REFINITIV, Note: Purple color line reflects Relative Strength Index (14-Period)

Stock Recommendation

The stock has delivered 9-month and one-year return of ~-15.62% and ~-6.90%, respectively. The stock has made a 52-week low and high of $0.021 and $0.043, respectively.

The company’s current ratio stood at 36.80x in H1 FY 2021 as compared to the industry median of 2.03x. Therefore, it could be said that KRR is possessing decent liquidity position.

Considering the aforementioned factors, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.026 per share (Time: 3:46 PM (GMT +10), Sydney, Australia) as of 22^nd October 2021.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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